Bitcoin Fog Mixing Service Founder Arrested

  • The founder of the bitcoin Fog mixing service has been arrested in Los Angeles
  • Roman Sterlingov is accused of a litany of financial crimes for allegedly helping to launder 1.2 million bitcoin
  • Using bitcoin mixing services is not illegal but operating them is

The operator of the Bitcoin Fog bitcoin mixing service has been arrested on three counts related to the alleged laundering of $355 million. Russian-Swedish Roman Sterlingov, 32, started Bitcoin Fog in 2011, with the Department of Justice (DoJ) claiming that the site has helped obfuscate the origins of some 1.2 million bitcoin over ten years. According to the DoJ the bulk of the tumbled bitcoin has links to “illegal narcotics, computer fraud and abuse activities, and identity theft” on the dark web, acting as a “go-to money laundering service for criminals seeking to hide their illicit proceeds from law enforcement.”

Bitcoin Fog Founder Faces Prison or Hefty Fine

Sterlingov was arrested at Los Angeles International Airport on Tuesday, the same airport where former OneCoin CEO Konstantin Ignatov was arrested in 2019, on charges of money laundering, operating an unlicensed money transmitting business, and money transmission without a license. Sterlingov could face decades in prison for operating Bitcoin Fog, although the case of Larry Dean Harmon could be a precedent — Harmon was hit with a $60 million fine last year for operating Helix and Coin Ninja bitcoin Mixers.

Cryptocurrency Mixers Technically Legal to Use

Bitcoin mixers such as Bitcoin Fog still operate in something of a gray area, with the Department of Justice previously labelling the use of them a “crime”, yet turning a blind eye when the FBI seemingly used them in a 2018 case. The case in question involved ₿39.67 retrieved from a convicted sim swapper, with victims surprised to see that the FBI had possession of the coins eight months earlier than they had initially said.

The coins themselves arrived not from the criminal’s address but from an address that was almost certainly that of a bitcoin mixing service- perhaps even Bitcoin Fog. This meant that victims had to take on faith the FBI’s statement of how much was recovered, something that past events, in particular the Silk Road case, have shown to be troublesome.

Originally published at https://fullycrypto.com on April 29, 2021.

--

--

--

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

MillionPieces Phase 1: World in Pieces

Why should you choose a PPS Pool?

AFR Young Rich List Crowded with Crypto like never before

AFR Young Rich List Crowded with Crypto like never before

Another Token! Why?

Say Hi to the Newest Member of Wanchain’s Family of Cross-chain DeFi Applications — WanFarm

HSC Monthly Report: August Progress Review

How to buy Banano on Mercatox

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
FullyCrypto

FullyCrypto

More from Medium

Arcanum Ventures is Backing metaENGINE

3 Ways of Buying Bitcoin on Binance P2P

3 Ways of Buying Bitcoin on Binance P2P

Vitalik Buterin (Ethereum Co-Founder) says ‘Soulbound Tokens’ will help Verify Educational…

Regulators keep an eye on crypto